COUNTRY REPORT CHINAshareholders Shenzhen Peng Bo Group
and Beijing Tongling Communication
Technology have agreed to subscribe to no
more than Rmb1.2bn of the shares each.
Dongxing Securities is the sole
bookrunner. Proceeds will be used for
telecommunication projects and a new-
media platform.
The placement still needs written
approval from the CSRC.
Courier company YUNDA has reduced
the target size of a proposed private share
placement to Rmb4.11bn from the original
Rmb4.52bn.
The company plans to make available not
more than 243m shares at a floor price to
be set on the first day of issuance.
Citic Securities is the sole bookrunner.
Proceeds will be used to build logistics
centres, upgrade information technology
and fund urban delivery services. The
placement still needs CSRC approval.
GUOYUAN SECURITIES has received written
approval from the CSRC for a proposed
private placement of not more than 456m
shares to five investors to raise up to
Rmb4.21bn at a fixed price of Rmb9.25.
Controlling shareholder Anhui Guoyuan
Holding (Group) has agreed to subscribe to
Rmb728m. Corporate funds were the other
main buyers.
Citic Securities is the sponsor. Proceeds
will mainly be used to expand capital-based
intermediary business and investment
business.
LONGYUAN CONSTRUCTION GROUP has passed
a CSRC hearing for a proposed private
placement of not more than 268m shares
to raise up to Rmb2.87bn at a floor price of
Rmb10.74.
Proceeds will be used for four
construction projects. China Securities is the
sole bookrunner.› CCC PLANS RMB20BN CB ISSUECHINA COMMUNICATIONS CONSTRUCTION has
obtained board approval for a proposed
issue of six-year convertible bonds of up to
Rmb20bn.
Proceeds will be used for infrastructure
investments and purchase of engineering
ships and mechanical equipment.
Citic Securities , China Securities and BOC
International (China) are joint bookrunners,
according to two sources familiar with the
process.
The issue still needs approval from
shareholders and regulators.
BEIJING ORIENTAL YUHONG WATERPROOF
TECHNOLOGY has raised Rmb1.84bn from a
six-year CB offering.
As the first offering under China’s new
subscription rules, the CBs received anoverwhelming response with the public
tranche about 75,827 times covered.
Existing shareholders took about 85.5%
of the CBs, while retail investors bought
the rest.
Under new rules introduced on
September 8, investors buying CBs in the
retail tranche no longer need to make
upfront payments. For the institutional
tranche, the upfront payment for each
investor is capped at Rmb500,000.
The Beijing Oriental CB pays a coupon of
0.3% in year one, before it steps up to 1.8%
in year six. The initial conversion price is
Rmb38.48, representing a discount of 1.1%
to the pre-deal spot. The unsecured bonds
received a AA rating from Dagong.
Guotai Junan Securities was the sole
bookrunner on the issue, proceeds of which
are for production.
YANKUANG GROUP has raised Rmb3bn
through a private placement of three-year
exchangeable bonds in the A-shares of
YANZHOU COAL MINING.
The coupon is 1.70% in year one before a
0.50% increase annually in subsequent years.
The initial conversion price was set at
Rmb14.10, or a premium of 7.8% to the
September 26 closing of Rmb13.08.
The securities can be exchanged for
Yanzhou Coal’s A-shares after six months.
Citic Securities was the sole bookrunner.CK Hutchison looks to offshore market
Bonds Hong Kong conglomerate meets demand for short tenors from US investorsCK HUTCHISON drew orders of over US$4bn last
Tuesday for US$2.25bn of bonds across three
tranches of three, 5.5 and 10 years.
The Hong Kong conglomerate priced the
US$1bn three-year at Treasuries plus 77.5bp,
off initial guidance of plus 95bp area, the
US$750m 5.5-year at Treasuries plus 92.5bp,
off 110bp area, and the US$500m 10-year at
Treasuries plus 107.5bp, off 125bp area.
The three-year was sized to meet strong
demand at the short end, particularly
from US real-money accounts and some
top corporate treasurers. It also met some
pent-up demand, since Hutch had not sold
three-year notes in its previous two visits to
the dollar market this year.
Hutch had outstanding March 2022 bonds
quoted at a G spread of 85bp, implying that
the 5.5-year issue priced flat to the curve. A
March 2027 bond was seen at G plus 97bp,
implying fair value of around 100bp for a
new 10-year and pointing at a new-issue
concession of around 7bp.
That was expected, since investors tendto snap up long-dated paper from Hutch in
secondary, making the curve unusually tight.
The Hutch five/10 curve was seen at around
12bp last Tuesday, compared with 20bp–
25bp for investment-grade issuers globally.
The three-year drew orders of US$1.7bn
from 88 accounts. The US bought 80% of
the 144A/Reg S notes, Europe purchased
12% and Asia took 8%. In terms of investor
types, a combined 52% were asset managers
and fund managers, 29% were corporate
investors, a total of 7% were sovereign wealth
funds and central banks, a total of 6% were
insurers and pension funds, 5% were banks
and 1% were private banks.
The 5.5-year drew orders of US$1.25bn
from 103 accounts. The US bought 46%, Asia
purchased 32% and Europe took 22%. As for
investor types, a combined 45% were asset
managers and fund managers, 21% were
banks, a total of 14% were sovereign wealth
funds and central banks, 13% were corporate
investors, 4% were insurers and pension
funds and 3% were private banks.The 10-year garnered demand of US$1.1bn
from 79 accounts. Asia bought 44%, the US
took 42% and Europe purchased 14%. Of
the investors, a combined 50% were asset
managers and fund managers, a total of 26%
were insurers and pension funds, 20% were
banks and a combined 4% were sovereign
wealth funds and pension funds.
CK Hutchison International (17) (II) is
the issuer on the notes and CK Hutchison
Holdings is the guarantor.
The notes have expected A3/A–/A–
ratings, in line with the guarantor.
Proceeds will be used to refinance debt
and for general corporate purposes.
Barclays , Citigroup , Goldman Sachs and
Morgan Stanley were joint bookrunners.
CK Hutchison is Hong Kong tycoon Li
Ka-shing’s vehicle for businesses like ports,
telecommunications and infrastructure.
The 2020s, 2023s and 2027s were seen
1bp, 1.5bp and 3.5bp tighter, respectively, in
Wednesday morning trading.
DANIEL STANTON